Argument

Auf Wiedersehen, Mon Ami

As her buddy, Nicolas Sarkozy, leaves office, Angela Merkel is now left all alone. Can she still steer the European ship without a first mate?

If the results of the latest elections are any indication, Europeans will elect anyone from communists to fascists if they promise to fight German Chancellor Angela Merkel over the financial austerity measures she has imposed on the eurozone.

French Socialist François Hollande rode to victory on a wave of popular dissatisfaction on Sunday, May 6, defeating President Nicolas Sarkozy, a close ally of Merkel. "You did not resist Germany," Hollande declared in a televised debate late last week, accusing Sarkozy of acquiescing to German economic measures that require France and other EU states to make deep, painful cuts to their social welfare spending.

Hollande now joins the collapsed Dutch government of Prime Minister Mark Rutte -- which unraveled in late April over resistance to economic belt-tightening -- to deliver a one-two austerity punch to Germany. Compounding Merkel's political isolation on Sunday, May 6, voters knocked her Christian Democratic Union (CDU) out of a governing coalition in a regional election. Although the CDU secured the most votes in the northern state of Schleswig-Holstein, it was the party's worst electoral performance since 1950.

In a shot across the Rhine, Hollande declared in his victory speech in the small southwestern French town of Tulle that "austerity is no longer inevitable."

Yet for all his bluster, Hollande likely won't be able to impose radical change on Europe's core economics. The powerful German economy has kept the euro afloat as Greece, Italy, Spain, and other countries have drawn perilously close to the brink of collapse. Its manufacturing and exports businesses remain the engine of European prosperity.

Under the fiscal treaty Merkel advanced this year, EU member states are required to ensure that their "deficits do not exceed 3 percent of their gross domestic product at market prices" and must maintain strict limits on government debt. The treaty goes to great lengths -- with corrective measures and potential legal action against member states -- to prevent a repeat of a Greek-style economic meltdown.

On Sunday, however, Hollande promised a "new start for Europe," spelling a possible wholesale revision of the fiscal treaty. All this has investors (and speculators) worried: His victory on Sunday, along with the weekend's anti-austerity Greek election results, prompted the euro to sink to an eye-popping almost-five-month low of $1.2988.

All this helps explain Gideon Rachman's recent Financial Times commentary, "No Alternative to Austerity," in which he notes that France is "a country where the state already consumes 56 per cent of gross domestic product, which has not balanced a budget since the mid-1970s, and which has some of the highest taxes in the world."

Of course, this is all anathema to the rule-abiding Germans. In 2003, Merkel's predecessor, Social Democratic Chancellor Gerhard Schröder, introduced his Agenda 2010, a sort of watered-down version of U.S. President Bill Clinton's "welfare-to-work" program, which cut taxes, unemployment benefits, and other social welfare programs. The reforms brought German unemployment down from over 5 million in 2005 to 2.8 million today. Merkel has since led the way in imposing similar discipline across the eurozone, and Sarkozy has helped her.

"Europe must be pulled out of paralysis," declared Sarkozy on his first presidential visit to Berlin after his May election victory nearly five years ago, urging the German leader to join him and "take the initiative." Merkel reciprocated, culminating in a political alliance to retain EU unity and eventually impose robust fiscal discipline on the 17 eurozone countries. The unlikely and oft-quoted fusion of these two leaders -- Merkozy -- advanced an ambitious plan to prevent the European Union from fragmenting.

After French and Dutch voters rejected the EU Constitution in 2005, Merkel and Sarkozy successfully steered the European Union's Lisbon Treaty to ratification in 2008. The treaty aims to streamline the EU's bureaucratic decision-making process and generate more transparent federalism among its members. "We're a harmonious couple," Sarkozy quipped after sealing the deal with his partner.

Sarkozy and Merkel are proof positive that opposites attract. The prickly, high-energy French president struck a dramatic contrast with the clinically analytical, no-nonsense Merkel, the daughter of a Protestant pastor, who grew up in modest surroundings in the former East Germany and became a physical chemist. Sarkozy was accompanied at all times by his model and singer wife Carla Bruni, while Merkel was rarely seen in public with her husband, Joachim Sauer, a chemistry professor at Humboldt University in Berlin.

It seems Germans took to this odd pair. A poll conducted last week by the prominent German survey organization Infratest dimap for the conservative daily Die Welt showed 55 percent of German respondents supporting Merkel's austerity measures and only 33 percent opposed. Fifty percent of those polled said they hoped Sarkozy would remain in office; only 24 percent supported Hollande.

But whom will Merkel turn to now? This year, British Prime Minister David Cameron withdrew his support for the fiscal compact, leaving Merkel alone in the wilderness, with only Sarkozy by her side. Cameron declined to meet with Hollande during his February visit to Paris, and Merkel, like her British counterpart, expressed a preference during the election for a second Sarkozy term.

Although Merkel said on Monday that the fiscal accord is "nonnegotiable," she stressed that "German-French cooperation is essential for Europe" and that her administration "will welcome François Hollande with open arms." For his part, Cameron congratulated Hollande on his victory and said that Britain will continue to develop its "very close relationship" with France.

Needless to say, both leaders recognize that, as Europe's second-largest economy, France is vital for EU monetary stability. Together, Germany and France have navigated Europe through an economic minefield. Merkel has served as a tough schoolteacher, cracking the whip and delivering tough love, but also bailing out Greece with German credit to prevent the periphery -- and potentially the eurozone as a whole -- from imploding.

In an age of financial meltdowns and seemingly bottomless unemployment, Merkel has presided over an economic miracle -- German industrial orders rose 2.2 percent in March alone -- but she can't impose austerity on her own, and she faces some tough decisions now.

Hollande seeks to renegotiate Merkel's fiscal treaty to include economic growth measures, including more public spending to generate employment. Consequently, she will be caught in an economic vise. Merkel can either block French stimulus actions (and possibly spook the eurozone market) or continue to champion a strict economic diet for Europe.

If the odds look stacked against Merkel right now, it's still too early to bet against her: She's clever, pragmatic, and given to compromise. And though her political enemies may have managed to isolate her for the moment, she sits atop the most important economy in Europe.

And like Sarkozy before him, Hollande may soon find himself unable to resist Germany, too.

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Argument

Medvedev the Phony

Russia's outgoing president was never the liberal reformer he claimed to be. But don't just take our word for it -- he said so himself.

The Russian political circus has extended its tour. Four years ago, Dmitry Medvedev was chosen to keep warm the seat of Vladimir Putin, and now as Putin returns to the presidency, Medvedev will assume the post of prime minister. This job swap, announced last September, might have been accepted by most Russians without a murmur several years ago, but Russia has changed dramatically since then. The swap instead has deepened resentment among many in the country, who view it as a slap in the face. In December, hundreds of thousands of Russians took to the streets against the rigged election, which in their eyes made Putin's presidency illegitimate.

But where does this leave Medvedev? "Who?" some might ask dismissively. "Putin's puppet?" others might sneer. To many Russians, the outgoing president is viewed as a nonentity whose primary concrete legacy will be the absurd reduction of Russia's time zones from 11 to 9. During his putative presidency, the Russian system displayed unmistakable signs of decay, demonstrated by the growing role of repressive organs and their criminalization, the fusion of power with property, and the ruling elites' attempts to pass their wealth and positions to their families and friends. Medvedev would often utter liberal-sounding ideas -- his anodyne comment that "freedom is better than non-freedom" caused quite a flutter of excitement, briefly -- but the follow-through on his proposals was never there. He had the power only to speak, not act. The more he tried to be taken seriously, the more comical and pathetic he looked. Often, Putin would be caught by cameras looking at his protégé with condescending amusement.

Why, then, would Putin keep Medvedev on as prime minister? Former Finance Minister Alexei Kudrin, or nearly any other high-level official, would arguably be a more effective choice. But effectiveness isn't Putin's goal. Instead, his criteria are based on loyalty, keeping a corrupt architecture intact, and eliminating potential threats. This is how the personalized system in Russia works: By stepping aside and not running for reelection, Medvedev has demonstrated his loyalty to Putin, and in turn, Putin has shown that he rewards loyalty. The only silver lining of Putin's return to power may be how it reveals Medvedev's supposedly reformist presidency for the farce it really was.

Here is Medvedev's legacy in one sentence: He enabled Putin's personalized rule to continue unabated.

Medvedev played his role to a T. He guaranteed the regime's continuity and helped Putin avoid violating the constitutional ban on serving more than two consecutive terms. But he did more than that. For Putin's return, Medvedev lengthened the presidential term from four to six years, and should Putin eye a second term in 2018, he could wind up serving as president for 20 years (24 if you count the stint as prime minister when he was still really calling the shots).

Medvedev's signature policy was modernization, but beyond building Skolkovo -- his dubious attempt at fostering a Russian "Silicon Valley" -- he has little to show for it. Indeed, modernization, like many things Medvedev advocated, has been a major disappointment. He called for a serious anti-corruption campaign, but corruption remained pervasive during his tenure, according to Transparency International's surveys. He promised that those responsible for attacks and murders against journalists, activists, and opposition leaders would be investigated and brought to justice; instead, in a case that exemplifies Medvedev's impotence, a lawyer, Sergei Magnitsky, beaten and allegedly murdered in prison for exposing corruption, is being prosecuted posthumously.

By the end of Medvedev's presidency, Russia endowed law enforcement agencies with increased powers and witnessed greater harassment of the opposition and administrative pressure on entrepreneurs (every third prisoner in Russia is a businessman). Shakedowns by police or other state authorities have become a more regular occurrence for many Russians, leading a growing percentage to want to emigrate and along with them record amounts of capital flight. Russia remains heavily dependent on commodities and their export amid dwindling expenditures on social needs and militarization of the budget (one-third of its expenditures go to the "power ministries"). The farcical second trials of oligarchs Mikhail Khodorkovsky and Platon Lebedev took place under Medvedev's watch, and he also passed on the opportunity to pardon both men.

It was under the "liberal" Medvedev that mass fraud took place during the December 2011 parliamentary elections and the March 4 presidential election. The official Duma results gave the party in power, United Russia, 49.3 percent, but reliable exit polls suggest its tally was closer to 35 percent. Similarly, Putin officially got 64 percent of the vote, whereas independent sources claim that he scored below the 50 percent threshold necessary to avoid a runoff.

If anything, Medvedev actually stoked the educated urban population's resentment of the regime with his empty preaching on democracy and freedom. He came to resemble the doddering and impotent Soviet leader Konstantin Chernenko, whose elevation as general secretary of the Communist Party in 1984 following Yuri Andropov's death symbolized a decaying system; people were simply waiting for him to pass from the scene, too. Despite their difference in age, Chernenko and Medvedev both achieved the same result by deepening people's revulsion with the system. At the same time, their impotence led to an erosion of fear, an emotion Putin had used effectively to maintain control during his first eight years in power. That reduction in fear may in fact make a fragile regime even more brittle.

On foreign policy, Medvedev's presence in the Kremlin allowed Washington to go ahead with the reset, a policy largely unthinkable had Putin remained president. Obama saw restoring the Moscow-Washington relationship that soured at the end of George W. Bush's administration as a top priority and consequently spoke or met with Medvedev more than almost any other world leader. The reset policy overlooked the fact that the Russian system, notwithstanding the softer Medvedev facade, had not changed; this reality has become more apparent in the past year over differences on Syria, missile defense, and human rights. Moreover, one shouldn't forget that the August 2008 Russia-Georgia war happened on Medvedev's watch, and Moscow's annexation of the Georgian regions of South Ossetia and Abkhazia reflects its continuing neo-imperialist tradition. It should have been obvious to all much earlier that Medvedev's liberal, pro-Western image was more fiction than fact.

Many in Russia hoped that Medvedev represented a real change from Putin and Putinism. Russian opposition leaders even accepted Medvedev's invitation to discuss democratization after the December 2011 protests. Human rights leaders were cautiously willing to see whether progress was possible, and they were willing to lend their participation to the presidential Civil Society and Human Rights Council. At least four members of this presidential council have no intention of continuing to serve under Putin, according to its chairman, Mikhail Fedotov.

In the West, quite a few were enchanted by the new Kremlin tenant. One of the most astute observers of Russia, Zbigniew Brzezinski, in his book Strategic Vision: America and the Crisis of Global Power, described Medvedev as "the most prominent spokesman for the modernization-democratization school of thought" and noted Medvedev's understanding of the need for democratization as a "milestone in Russia's political evolution." Other observers, including some in the U.S. government, offered gushing praise of Medvedev, attributing great significance to his pronouncements on modernization and anti-corruption.

More recently, Medvedev set his admirers straight. "In my views, I've never been a liberal," he announced after accepting an offer to lead the United Russia party, essentially admitting that he had been lying not only to his Western interlocutors, but to his citizens as well. Medvedev became a convenient excuse for some who wanted to reconcile or do business with the Kremlin. In reality, his hollow rhetoric legitimized the reality of Russian authoritarianism and helped the Russian political elite and business oligarchs interact with the West.

In moving to the prime minister's position, Medvedev will remain a footnote in history. At least now, however, the West and those inside Russia waiting for Medvedev to begin real change can stop pretending and hoping. Putin's formal return to the Kremlin lays bare the real Russian system of one-man rule we've in fact been dealing with for the past dozen years.

The end of Medvedev's phony liberal presidency is likely to force the Kremlin to rely more on repressive mechanisms and stoke nationalism. This, in turn, is likely to produce rising frustration and anger within society and possibly spark political upheaval; already, more labor strikes have occurred in Russia this year than all of last year. Disappointment with Medvedev is apt to kill the false hope that change would emanate from the top in Russia. At the same time, pressure from below could lead to unforeseen circumstances not unlike those witnessed recently in the Arab world.

As Medvedev relinquishes formal power, he leaves his country demoralized. Under his presidency, the regime became more corrupt and discredited, while the country stagnated. The one bright spot is that the Russian people have displayed an awakening, a growing desire to demand accountability from their government. Sunday's demonstration involved tens of thousands of protesters; hundreds were arrested and brutally assaulted by massive security forces in the latest evidence that the regime is losing legitimacy. The crackdown, which aptly occurred on Medvedev's last day in office, raises more questions about the sustainability of the system. The protesters' readiness to confront the authorities proves that Russia is entering turbulent times.

In preparing for his departure, Medvedev said, "Everybody should relax: This" -- his tandem with Putin -- "is for a long time." Such cocky sentiments suggest that neither he nor his boss has learned any lessons from their time in the Kremlin, let alone any lessons from Russia's long history.

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